Is the wage gap between majors in human arts and other fields caused by the education?
If the educational choice is endogenous, the wage gap may instead be caused by selection. We
document that individuals’ educational choice is correlated with that of older students and by
the concentration of women in their high school. Conditional on high school fixed effects, these
characteristics are unlikely to affect post-university wages and are plausible instruments for the
educational choice. Our 2SLS estimates reveal that the gap in returns to education is negligible,
implying that the wage gap is attributable to selection.

Is the wage gap between majors in human arts and other fields caused by their education per se? If the educational choice is endogenous, the gap may instead be caused by selection. We document that individuals’ educational choice is correlated with that of older students, and argue that it should not influence wages directly.
Exploiting this "cohort dependence" as an instrument for educational choice, our 2SLS estimates show that the hourly wage gap is attributable to selection. However, only half of the gap in annual earnings is explained by selection, whereas the other half is due to lower work hours.

Files in this item: 1

This thesis consists of four empirical essays within the broad field of modern labor
economics. All four essays are self-contained and can be read independently of the others.
Chapter 1 investigates the distinct effects on information technology and communication
technology on firm’s skill demand. Chapter 2 studies whether the observed wage gab
between majors in human arts and other fields are caused by their education per se or by
selection. Chapter 3 examines taxable income responses to variation in marginal tax rates.
Chapter 4 analyzes the effect of income taxation on the international migration of top
earners. Each chapter provides an independent and separate analytical contribution to their
specific field.